UK Business News Today: 17 September 2026 | Economy, Markets & Insolvencies

Inflation and borrowing costs are moving back to the top of the business agenda. UK CPI rose to 3.1% in August, largely because of higher petrol and diesel prices, while economists warn that continued energy disruption could push inflation above 4% in the months ahead. At the same time, Prime Minister Andy Burnham and Chancellor John Healey face increasingly difficult Budget choices as higher government borrowing costs reduce fiscal headroom. For SMEs selling on credit, the combination of rising input costs, potentially higher interest rates and uncertainty over taxation makes careful credit decisions, prompt collection and close monitoring of customer payment behaviour increasingly important.

James Salmon, Operations Director.

Key Developments

• UK inflation rose to 3.1% in August, up from 2.9% in July, driven principally by higher fuel costs.
• Energy prices could push inflation above 4% in the new year, increasing the possibility of further Bank of England tightening.
• The October Budget is becoming more difficult, with higher borrowing costs and energy prices squeezing government fiscal headroom.
• US interest rates have risen again, with the Federal Reserve lifting its target range by 25 basis points to 3.75%–4.00%.
• Oil prices eased this morning, but Brent remains above $100 a barrel, leaving transport, production and supply-chain costs elevated.

Economy & Policy

UK inflation rises to 3.1%

UK CPI inflation rose from 2.9% in July to 3.1% in August, with the Office for National Statistics pointing to sharp increases in petrol and diesel prices. Services inflation remained at 3.4%, core inflation held at 2.6%, while food inflation remained relatively subdued at 1.3%.

Fuel costs increased 6.9% during August, compared with just 0.4% in the equivalent period last year. Economists increasingly expect inflation to move higher over the coming months, with some forecasts suggesting it could reach 4%–4.5% if geopolitical disruption continues to keep energy prices elevated.

Why it matters: Higher fuel, transport and energy costs can quickly squeeze SME margins and increase the risk that customers stretch payment terms to preserve their own cash.

Interest-rate outlook becomes more difficult

The latest inflation data arrives as the Bank of England assesses whether its current 3.75% Bank Rate remains appropriate. Higher energy costs are creating renewed inflation pressure even as UK labour-market data point towards softer employment conditions.

Market expectations have increasingly shifted towards the possibility of further tightening if inflation continues to accelerate. Recent analysis has highlighted the risk that oil and energy prices could force the Bank to reconsider its wait-and-see approach.

Why it matters: Higher borrowing costs affect overdrafts, asset finance, mortgages and working-capital facilities while also increasing financial pressure on customers buying on credit.

House-price growth slows

Average UK house prices rose 1.4% year on year in July to £273,000, according to the ONS, slowing from 1.5% growth in June.

Higher mortgage rates and continuing household cost pressures are contributing to subdued housing-market activity heading into autumn.

Why it matters: Weak housing activity can affect confidence and demand across construction, home improvement, furnishings, professional services and many local supply chains.

Tax & Government

Government warns of a “challenging” Budget

Prime Minister Andy Burnham has warned that the forthcoming Budget will be challenging as higher energy prices, market volatility and rising government borrowing costs reduce the Treasury’s room for manoeuvre.

Chancellor John Healey faces pressure to reconcile government spending commitments with weaker fiscal headroom ahead of the 28 October Budget. Recent reporting indicates rising borrowing costs have materially reduced the buffer available against the Government’s fiscal rules.

Why it matters: Businesses need to prepare for the possibility of tax changes at the same time as they are already absorbing higher energy, employment and finance costs.

Capital gains tax reportedly under consideration

The Government is reportedly examining potential changes to capital gains tax as part of its Budget options.

Current main CGT rates are 18% for basic-rate taxpayers and 24% for higher-rate taxpayers, while Business Asset Disposal Relief rose to 18% from April 2026.

Supporters of higher CGT argue it could increase Treasury revenue, while critics warn that large increases could discourage investment or delay asset disposals.

Opposition calls for restraint on business taxation

Shadow Chancellor Andrew Griffith has called on the Government to avoid new business taxes and has announced a review of the burden facing smaller companies. He has also argued for tax simplification and changes to the rollout of Making Tax Digital.

Making Tax Digital for Income Tax already applies from April 2026 to qualifying sole traders and landlords with relevant income above £50,000.

Conservative leader Kemi Badenoch has separately warned of substantial tax rises in the forthcoming Budget. Those statements represent opposition political arguments rather than confirmed government policy.

Haldane warns over borrowing costs

Former Bank of England chief economist Andy Haldane has argued that markets could remain concerned about government borrowing unless credible choices are made over taxation and spending.

The debate comes as gilt yields, energy prices and inflation increasingly constrain the Chancellor’s options.

Employment & Business Costs

Entain plans around 400 job cuts

Ladbrokes owner Entain is consulting on the loss of approximately 400 jobs globally, potentially affecting around 20% of its 2,000 customer-care roles across 11 countries, including the UK.

Chief executive Stella David linked the proposed reductions to higher taxation and wider cost pressures and said the impact could fall disproportionately on younger and part-time workers.

Industry & Investment

CMA investigates McCormick acquisition of Unilever Foods

The Competition and Markets Authority has opened a phase-one investigation into McCormick’s proposed acquisition of Unilever’s Foods business.

The regulator is examining whether the transaction could result in a substantial reduction in competition in any UK goods or services market. Its phase-one decision is due by 11 November.

Next raises profit expectations

Retailer Next has increased its full-year pre-tax profit guidance to approximately £1.26bn, supported by resilient trading.

However, its leadership has also warned that further business taxation could weaken growth and employment. Recent results showed group sales and profits continuing to rise despite concerns over inflation and household finances.

Technology & AI

King Charles brings AI leaders together

King Charles III is convening senior figures from Nvidia, OpenAI, Google DeepMind and Anthropic at Dumfries House in Scotland to discuss the benefits and risks of increasingly powerful artificial intelligence.

The meeting is expected to focus on keeping safety at the heart of development and building international cooperation around advanced AI systems.

The discussion takes place amid an intensifying global debate over frontier AI development and the ability of governments and companies to manage increasingly capable systems.

OpenAI reports further AI “misalignment”

OpenAI has disclosed six further cases of unexpected model behaviour, including systems allegedly concealing or fabricating information while trying to complete assigned tasks.

The company also reported examples of AI agents sharing private information with each other and said it intends to introduce a new framework for reporting model “misalignment”.

For SMEs adopting AI, the development is another reminder that automation still requires appropriate human oversight, data controls and verification.

International & Trade

EU-Canada proposal creates fresh trade tension

President Donald Trump has criticised the European Union’s invitation for Canada to establish a new associate relationship with the bloc and has threatened additional tariffs against the EU. The comments add to an already uncertain international trade environment.

Nepal and Tibet flood report highlights climate risk

Scientists at World Weather Attribution have concluded that climate change probably contributed materially to the devastating floods affecting Nepal and Tibet last month.

Warming temperatures and deteriorating Himalayan permafrost were identified as factors that may have contributed to the rock-ice avalanche preceding the disaster. More than 1,300 people have been confirmed dead, with thousands reported missing.

Although geographically distant from the UK, the event highlights the growing commercial importance of climate resilience, insurance exposure and international supply-chain contingency planning.

Global Market Summary

Global markets remain dominated by interest rates, inflation and energy prices.

The Federal Reserve raised its target rate by 25 basis points to 3.75%–4.00%, its first increase since July 2023. The decision was unanimous and officials signalled that another rise this year remains possible.

US shares reacted negatively on Wednesday. The S&P 500 fell 0.45% to 7,551.81, the Dow Jones dropped 1.21% to 51,461.90, while the Nasdaq Composite was virtually unchanged, down 0.01%.

European markets were firmer on Thursday morning as oil prices eased and investors digested the Fed decision. At 10:26 BST:

• FTSE 100: 10,741.86, +0.50%
• STOXX Europe 600: 640.44, +0.53%
• STOXX Europe 50: 6,305.13, +0.62%
• DAX: 25,687.08, +0.58%
• CAC 40: 8,163.73, +0.28%
• S&P 500: 7,551.81, -0.45% at Wednesday’s close
• Dow Jones: 51,461.90, -1.21%
• Nasdaq: virtually unchanged, -0.01% on the composite index
• Nikkei 225: 64,136.25, +0.33%
• Hang Seng: 24,604.29, -0.44%

Market drivers

The main driver remains monetary policy. The Fed’s rate rise pushed US Treasury yields higher, with the 10-year yield briefly moving above 5%, before easing back towards 4.99% on Thursday morning.

Energy remains the second major influence. Saudi Arabia is reportedly working to restore around half of the capacity of its East-West pipeline after disruption from Houthi attacks, helping to remove some of the immediate supply premium from crude prices.

For UK businesses, the significant point is that lower oil prices today do not mean energy pressure has disappeared. Crude remains historically expensive, while geopolitical disruption continues to create considerable uncertainty around future costs.

Currencies

Sterling was relatively steady:

• GBP/USD: 1.3393, +0.09%
• GBP/EUR: 1.1673, +0.02%

The dollar had strengthened sharply following the Fed decision before giving back a small proportion of those gains on Thursday morning.

Commodities

• Brent crude: $104.53, down 1.23%
• WTI crude: $101.48, down 0.93%
• Gold: $4,310.08, up 1.09%

Oil eased as Saudi pipeline restoration plans reduced immediate supply concerns. Gold remained strong as investors continued to seek protection against geopolitical and financial uncertainty.

For SMEs, energy markets remain particularly important. Oil above $100 can feed into fuel surcharges, haulage, manufacturing, packaging and supplier costs — and those pressures can ultimately affect how quickly customers pay.

Insolvency Watch

Today’s notices underline why businesses supplying goods and services on credit need to monitor customers continually rather than relying solely on historic trading relationships.

Administrations (2)

• ALEXANDERS DISCOUNT LTD
• I.B.R GROUP LIMITED

Liquidations (12)

• BRISTOL ROAD PROPERTIES LIMITED
• CARLTON SMITH HOLDING COMPANY LIMITED
• D&U DEVELOPMENTS HOLDINGS LTD
• D&U INVESTMENTS HOLDINGS LTD
• D&U OVERSEAS HOLDINGS LTD
• GREENWOOD BROS. (BUILDERS) LIMITED
• HAR CONSULTANCY SERVICES LTD
• HOST ONLINE LTD
• SYNAIRGEN LIMITED
• THE DIANA PRINCESS OF WALES INTERNATIONAL STUDY CENTRE LIMITED
• TWELVE CAPITAL (UK) LIMITED
• UK CATERING AND REFRIGERATION ENGINEERS LTD

Winding-up Petitions (5)

• AVORA HEALTHCARE LTD
• FOCUSED TECHNICAL LIMITED
• FORTY-ONE THIRTY LLP
• LISNAMORE RETAIL LIMITED
• STANFIELD (N.I.) LIMITED

Why stronger credit control matters when costs rise

Rising inflation does not just increase your own costs. It increases pressure throughout the supply chain.

A customer facing higher fuel bills, borrowing costs, wages or taxation may remain profitable on paper while becoming increasingly stretched for cash. That is often when invoices start taking longer to pay.

CPA can help businesses use CreditCare credit reports and debtor monitoring to identify changing customer risk, strengthen credit-control processes and improve payment performance.

Where invoices become overdue, CPA can support recovery through the professional and considerate approach of its Overdue Account Recovery Service, designed to secure payment while preserving valuable customer relationships.

Early action matters. An overdue invoice is already financing your customer at your expense, and delays become more significant when your own costs and borrowing requirements are rising.

Call CPA on 020 8846 0000 during business hours, Monday to Friday, 9am to 5pm.

Email PaidQuick@cpa.co.uk

Visit https://cpa.co.uk/contact-us/

When you see your money come in, you will be so glad you used CPA.

The Credit Protection Association : Prompting Punctual Payments : Ethical, Effective, Efficient, Economical collections.

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